Digital Euro Proposal Advances to Final EU Negotiations

_{Photo credit: Markus Spiske / Unsplash.com}

The European Parliament has approved its negotiating position on the digital euro, allowing talks with the Council of the European Union to begin on legislation to establish the bloc's central bank digital currency (CBDC).

Members of Parliament backed the proposal by 416 votes to 169, with 22 abstentions. The vote marks the final legislative stage before Parliament, the Council, and the European Commission begin trilogue negotiations on the text. The European Central Bank could begin issuing a digital euro as early as 2029 if Parliament’s proposal is agreed upon.

The proposed digital euro would complement cash rather than replace it. Under Parliament's position, it would be available free of charge for basic use and support both online and offline payments, as well as include privacy safeguards that limit the collection of personal payment data. 

Several elements of the framework remain under negotiation, including the compensation model for payment service providers and the maximum amount of digital euros individuals will be allowed to hold. Those issues are expected to be addressed during the upcoming trilogue discussions.

The Parliament's vote does not authorize the issuance of a digital euro. The ECB has said it will decide whether to launch the currency only after the legislation is adopted and the technical preparation phase is complete.